PAYE or Self Employed? UK Tax Guidance

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Tax is being deducted from my fee. I'm freelance. Is this right?

Most freelancers come across this problem from time to time. You're self employed, on a short term engagement for a production company in the UK and they want to stop you tax and national insurance. Is this correct?

Production companies in the UK need to follow specific rules from HMRC on whether or not to apply PAYE tax to a freelance worker's payment. Even though freelancers are self employed, the type of work they are doing for a production may not qualify for gross payment and they will have PAYE tax deducted from their wages.

Know your rights

As a freelancer, it's important that you know what the rules are so that you can avoid uneccesary deductions from your payments.

Some grades are automatically treated as self employed and no PAYE will be deducted by the employer.

There's also a "SEVEN DAY RULE" issued by HMRC which which means that workers of any grade who are engaged for fewer than 6 consecutive days need not have PAYE deducted from their payment. This applies only to income tax. National Insurance will be deducted.

HMRC Guidance - read this

Full and clear guidance from HMRC can be found here: